UPDATE 12PM: A crisis meeting is expected to be held today between Wagga City Council and the administrator of Douglas Aerospace. The meeting will be in Wagga.
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WAGGA City Council is again under fire after a company it loaned $2.5 million to fell into voluntary administration on Monday.
Council controversially loaned aviation business Douglas Aerospace $2.5 million in January 2012 to help meet the costs of building a large hangar at the Forest Hill airport.
But ratepayers may be forced to carry the can for $2.1 million pf the loan owing following aircraft refurbishment company’s collapse this week.
It comes just days after another key business partnership of council’s soured, with the company behind the $75 million Riverina Intermodal Freight and Logistics (RIFL) hub also being placed into voluntary administration.
Douglas Aerospace principal Doug Clarke could not be reached for comment on Tuesday morning.
But Wagga councillor Paul Funnell said the troubles plaguing both Traxion and Douglas Aerospace raised serious questions about council’s business judgment.
“It’s early days for both companies and there’s a lot to work through,” Cr Funnell said.
“But council is certainly under pressure … there should be accountability and culpability.”
Concerns were raised when the Douglas loan was made, with many claiming council should not be “playing bank” with ratepayer funds.
Sydney-based accounting firm Armstrong Wily has been appointed administrator of the Douglas company assets.
Council will hold discussions with its legal team and.the administrators in the coming days.
